An Act Against Such Persons as Do Make Bankrupts: Whereas divers and sundry persons craftily obtaining into their hands great substance of other men's goods, do suddenly flee to parts unknown, or keep their houses, not minding to pay or restore to any of their creditors their debts and duties, but at their own wills and pleasures consume the substance obtained, by credit, of other men, for their own pleasure and delicate living, against all reason, equity and good conscience: Be it enacted, etc. Some thirty years later, in the reign of King Henry's daughter, Elizabeth, another bankruptcy statute, more complete, was passed, with a preamble showing that those inherent needs of the credit system of doing business were continuing to vex our English ancestors. That preamble

reads:

Forasmuch as notwithstanding the statute made against bankrupts in the thirty-fourth year of the reign. of our late sovereign lord, King Henry the Eighth, those [sic] kind of persons have and do still increase into great excessive numbers and are like more to do if some better provision be not made for the repression of them, and for a plain declaration to be made and set forth who is and ought to be taken and deemed for a bankrupt: Therefore, be it enacted, &c.

Our forefathers who welded the British Colonies into the United States of America did so largely for economic reasons, the better protection of trade and commerce; and they emphasized the importance of bankruptcy law, and the necessity of making it nationwide, by providing, in the very first article of the Constitution, and in the same sentence with the clause giving to Congress the power to control interstate commerce, the correlative power to "enact uniform laws on the subject of bankruptices throughout the United States."

THE MODERN CREDIT SYSTEM

So it must be understood, at the outset, that bankruptcy law and bankruptcy courts are permanent parts of our modern credit system. It follows from the foregoing that right administration of bankruptcy law is one of the most important duties, if not quite the most important single duty, of the Federal judiciary, and must not be relegated to the position of an incidental or inferior duty but must be squarely met and adequately mastered.

Nevertheless, we have awakened to the fact that the Federal judges in general come to the bench with little. real knowledge of the needs which the bankruptcy law is meant to meet and how it meets them. It is safe to say that not more than one out of fifteen or twenty of the Federal judges administering that important law made any serious study of it before coming to the bench, and fewer still had any experience in the bankruptcy courts. Even the law schools slight its study and some of them ignore it altogether. Little wonder that many of the Federal judges, in the larger communities at any rate, confess the practical problems of its administration to be too complex and too unmanageable for them to master. The courts enact wellmeant rules; indeed they enact rule upon rule, which sometimes provokes one to repeat the remark of the late Judge Hough, who was one of the few judges who came to the Federal bench with practical knowledge of bankruptcy law and practice, to the effect that the making of these numberless rules is but a makeshift to avoid the necessity

of really mastering the problems of bankruptcy administration.

Now there is nothing so helpless as an insolvent estate. In other fields of litigation, in adversary litigation so to speak, there are two opposing parties, one sitting on each side of the trial table, each watching the other, keen to take advantage of every error made by the other, and each side getting the full benefit of any advantage over the adversary; so that in an adversary lawsuit we generally can be pretty well satisfied that all the facts and all the law will be developed and justice done. But it is not so with bankruptcy and other insolvency litigation. In bankruptcy litigation, differently from other litigations, there are usually many parties, sometimes a multitude of them, called creditors, no one of whom derives the whole benefit of any victory, or bears the whole loss of any defeat, but each one of whom has only a comparatively insignificant share of those benefits or losses in the form of increased or decreased percentages of dividends upon his claim. It is a common maxim that "what is everybody's business is nobody's business"; and so it has come to be true that there is nothing so helpless as an insolvent estate. The assets are left to the care of the receiver or trustee in charge and his attorneys. The very helplessness of an insolvent estate is an insidious invitation to unfaithfulness on the part of those in charge of it, to all of which the recent developments in the metropolitan districts bear terrible testimony.

It must be taken as an axiom that in order to administer any statute successfully the purpose and spirit of that statute must be truly understood and followed out. Nothing but trouble comes from an effort on the part of those administering it to change its purpose or to go counter to its fundamental concepts. Such attempts are like trying to row against the current. But such thwarting of the fundamental purpose of the bankruptcy statute has been, and at the present time is, one of the principal causes for the inability of the Federal judiciary to cope with the problems of bankruptcy administration, and is the deep-seated cause of the present receivership scandals.

A WELL FRAMED STATUTE

The present bankruptcy law is the most carefully framed statute that has ever been on the statute books of any country and it represents the best thought of England and America during the four centuries since the first bankruptcy act was passed in trying to arrive at the best principles and most effective procedure for the care of the respective rights of creditors and debtors in the event of business failures. For this reason, if for no other, is it true that those administering the law should devotedly try to ascertain and carry out the true intent and meaning of that law, instead of substituting their own ideas of a better law and a better method of procedure.

Bankruptcy law is based on the democratic principle that, in the event of a debtor's insolvency, the creditors, who are the beneficiaries of the insolvent fund, should have charge of the administration of his estate. The bankruptcy law places the selection of the trustee in bankruptcy in the hands of the creditors by majority votes, and discountenances any interference with their choice on the part of the court.

Ordinarily there is more or less of a period intervening between the filing of the petition and the adjudication of bankruptcy and election of trustee, during which it is necessary for some preliminary custodian to protect the property. This preliminary custodian under the former bankruptcy law was called by the modest name of "mesenger," for which the present law substitutes the dignified ppellation of "receiver." Whilst there may not be much ma name, nevertheless it would dampen the ardor of disrict leaders and other politicians hungry for reward, and essen the pressure of friends, if the office they were seeking rom the court did not bear this dignified name of receiver ut again bore that of messenger. The administration of he assets is more and more being kept in the hands of this emporary appointee of the court, the adjudication and lection of trustee by creditors being postponed. So the eceivership question has become of critical importance; or it is, in effect, Shall bankrupt estates be administered y the creditors or not?

It is almost unbelievable that in many districts the Fedral judges have set their faces stonily against any effort o select the creditors' choice to fill this temporary receiverhip, the attitude of the Federal judges being in effect that t is "contempt of court" for creditors even to suggest a andidate for the receivership. Yet nothing is plainer than hat the bankruptcy law contemplates that creditors should get together for administration of the estate. That is why he law provides for the trustee to be elected by them. So t cannot be true that a right administration of bankruptcy aw should ignore the organizing of creditors; indeed, it hould encourage their organizing and their participating n the selection of the administrative officers.

In the metropolitan districts, in almost every trade, eliable trade organizations have developed. By reliable rade organizations are not meant those mere collection gencies, contrived as adjunts to some lawyers' offices and nasquerading under the name of trade organizations, but actual, bona fide trade organizations, composed of the responsible business men of the respective trades. Maniestly, no one is more interested in seeing that frauds, concealments, false oaths, false financial statements, occurring n a particular trade, are punished, and that fraudulent transfers and concealments of assets and fictitious claims are frustrated, than precisely those business men who are thus organized together for the purpose of taking care of that trade's interests.

WHO SHOULD BE RECEIVERS?

In our metropolitan communities, at any rate, there thus exist, right at hand, the men whose suggestions for receivers would be the most reliable upon which the court could act, and who would likely be the most willing to cooperate with the court by making lists of such of their members as would be willing to act as receivers, or by the designating of some experienced man, perhaps the salaried manager of their trade organization, in whom they have confidence, to act En bankruptcies occurring in the trade. Most of these trade organizations are completely equipped for the efficient doing of such work, with appraisers, investigators and some of them with accountants, most of them indeed being carried on by experienced managers who know most intimately the personnel, wants and habits of the particular trade.

Among such in the metropolitan districts might be mentioned the Jewelers Board of Trade, the American Fur Merchants' Association, the Wholesale Shoe League and various associations of the hardware, textile and silk trades. and numberless others, composed of the leading business men of the trades. Moreover, there exist organizations of credit men who likewise are well equipped for economically and efficiently caring for the respective trade interests of their various classes of members.

In England the practical administration of bankrupt estates is handled by a board of trade, which is composed of business men, each trade having its own particular branch in the organization. To be sure, we have not, in this country, a board of trade, nor do we need such, so far as bankruptcy administration is concerned; for here exist already these trade and credit organizations, eminently fitted to perform the very functions which our brothers in England, whose experiences are running parallel with ours, have delegated to their board of trade and its branches.

But these various trade and credit organizations in our midst are ignored in the appointment of bankruptcy receivers, and their cooperation is flouted and rebuffed. Instead of sensibly welcoming their cooperation or even asking for it, the Federal judges appoint their own selections who, as the recent records have shown, are frequently hungry politicians, district leaders, ward captains, friends, and in some instances former office associates, not to mention those who ultimately acquire criminal or nauseating records. Whether such rebuffing of the trade and credit organizations, and such selecting of politicians, friends and former associates, are actuated by proper or even high motives or not is quite beside the mark. They are contrary to the obvious intent and meaning of the bankruptcy law, and therefore are bound to work badly, as they do.

At the present time, in one of the metropolitan districts. at any rate, the Federal judges have practically thrown up their hands and in effect surrendered the task of selecting bankruptcy receivers, which is one of the most important of all their functions, in desperation turning over all bankruptcy receiverships to one or more trust companies, such plan being more acceptable to them than the plain and sensible plan above outlined, so obviously intended by bankruptcy law, of putting the administration immediately into the hands of the creditors concerned. This effort to solve the vexing problem by turning the administration of bankrupt estates over to a trust company or some other official receiver who, even at the best, must meet the same problems and meet them by the efforts of human beings. of much the same calibre of abilities and character as other mortals possess, is bound to be but short-lived, running counter as it does to the fundamental principles of the bankruptcy law.

RECEIVERS' EMOLUMENTS

There is a somewhat prevalent idea that the emoluments. of United States receivers and trustees in bankruptcy are great. This is not so. By the amendment of 1910 all compensation of receivers and trustees in bankruptcy is placed on a very low percentage basis, and those officers are prohibited from being allowed or receiving "in any form or guise any other or further compensation * * * than that expressly authorized and prescribed in the act." The com

s history and is steadily increasing. Memphis is eng in full measure the prosperity that has come from development of this inland waterway. The powerful boats and heavy draft steel barges of the Federal Barge and the American Barge Line transport freight to from Memphis and private barges and packet steamdd their quotas to the volume of water borne freight. Mississippi River and the Panama Canal give Memphis 1 water haul to the ports of the world. emphis hotels rank with. est in the United States. new Hotel Peabody, a million dollars hostlery over 600 guest rooms h will be the hotel headters of the American Association is especially oped for convention pur5. The other downtown s, the Gayoso, the Chisthe Claridge and others. well known for their comble rooms and service and

cuisine. The Gayoso el will be our Conference dquarters. In addition to conveniences for meeting poses furnished by the els the new auditorium is ipped to take care of large onal assemblies and has eating capacity of 12,500 so arranged as to proe two halls each with its stage besides assembly ms, committee rooms and ibition space.

The citizens of Memphis re the North American e for the out-of-doors and re are two natural parks erton and Riverside, an usement park and 24 other

Industrially and as a distributing center Memphis is preeminent in many lines. It is the largest inland cotton market in the world, handling over two million bales annually. It is likewise the largest hardwood lumber market in the world and the home of the world's largest oak flooring plant and the largest producer of cotton seed products. In the United States Memphis is the largest sweet feed manufacturing point and leads the South in distribution of automobiles, farm implements and hardware and is in

C. H. King, Esq.,

July 1, 1929

My dear Mr. King:

CNB-L.

ks and playgrounds all owned by the municipality. All ms of outdoor sports are enjoyed as well as fine fishing 1 hunting in season. Every attraction is offered the fer. The zoo in Overton Park is one of the largest free s in the country with a great variety of animals and ds, And the Brooks Memorial Art Gallery is a veritable n of architecture housing fine collections of pictures, tuary and other art treasures. De Soto Park is the athern part of the city high on the Chickasaw Bluffs eps alive the tradition that it was here Hernando De Soto d his band of intrepid Spanish explorers discovered the ling floods of the mighty Mississippi. The first convenn ever held in Memphis was when De Soto held parley th Chisca Chief of the Indian tribe.

Educationally Memphis is the home of Southwestern ollege and of four units of the University of Tennessee d the Western Tennessee State Teachers College. It Ossesses two fine public libraries both endowed.

CHAS. N. BURCH,

President.

second place in the fabrication and distribution of steel. Memphis is the South's cheapest cash grocery market and wholesale truck market and enjoys the best insurance classification granted by the National Board of Fire Underwriters, and its health department has been given a rating which places it first among cities of 100,000 to 250,000 population.

Eight national road highways are routed through Memphis making it easy of access to the automobile tourist. Five of these highways cross the Mississippi River at Memphis over the Harahan Bridge and viaduct. This is one of two great railroad bridges that span the Mississippi River at Memphis and the only bridges crossing that river south of the Ohio.

Memphis occupies an area of 30.34 square miles with a population (1928 directory census) of 265,500. Bank clearings (1927) amounted to $1,191,854,409. Its average temperature is winter 42.9°, summer 80.1°.

In May, 1541, Hernando De Soto discovered the Mississippi River and a park bearing his name keeps alive the incident as part of the earliest recorded history of Memphis. In 1672 Joliet, a French trader, and Marquette, a Jesuit missionary, journeyed from Canada to the Chickasaw Bluffs in two birch canoes and claimed the territory for France as De Soto had previously claimed it for Spain. In 1682 La Salle also visited this site and was followed in 1739 by de Bienville, a distinguished soldier and colonial governor of Louisiana. His efforts to dislodge the Chickasaw Indians proved futile. In November, 1762, the King of France ceded all his colonial possessions in America to Spain and in February, 1763, by terms of a general treaty of peace between Great Britain, France, and Spain this district for the first time came under the dominion of the English crown. In June, 1796, the territory which included Memphis was taken into the Union as a part of the State of Tennessee. Later the Spanish Governor of Louisiana,

first railroad train came into Memphis from Charlesto South Carolina. In 1861 the flag of the Stars and Bars the Confederacy floated over Memphis. Following a gu boat battle on the Mississippi River in front of Memph the Federal forces were victorious in 1862. During the o cupancy General Nathan Bedford Forrest, gallant leade known as the wizard of the saddle, made a daring raid o Memphis riding his horse into the Gayoso Hotel, the head quarters of the Federal commanding general who fled his night shirt. The story is one the few survivors Forrest's cavalry love to tell.

Just across the border of Shelby County lies the State Mississippi and just across the Mississippi River is th State of Arkansas.